Definition of General Liability Insurance

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With many different business insurance policies available on the market, it can be tricky for a small business owner who is not an expert in the insurance field to navigate their way through the different options to decide which ones they need and what is most suitable for their business.

Liability insurance is a way of protecting your business against certain risks associated with running a business that can result in a costly lawsuit and large one-off payouts, such as accidents or injuries occurring on your business premises, damage to someone's property, causing a financial loss to someone, or damage caused by a faulty product.

General Liability Coverage

General Liability insurance is a core coverage for businesses as it offers protection against third party claims. It doesn’t cover employees and contractors of your business, who are generally covered by Workers Compensation insurance.

If you run a business or operate as a contractor, you will probably need one or more forms of liability insurance as a job requirement. General Liability insurance is one of the most commonly used forms of insurance for businesses and should be an early policy consideration if you are starting up a new venture.

General Liability insurance, also known as Business Liability Insurance or Commercial Liability Insurance, covers expenses (including legal costs, medical costs and repair costs) incurred if any non-employee suffers:

  • An injury or accident on your premises or caused by your product
  • Property damage (to a building or an item of property) caused by you, your employees or those acting on behalf of the business
  • Non-physical personal injury, such as reputational damage or copyright infringement

What Does General Liability NOT Cover?

General Liability insurance is one of the most commonly purchased forms of insurance on the market and covers a great deal of risks associated with running a business, but it doesn't cover all risks. As mentioned above, it doesn't cover risks relating to employees. It also doesn't cover the following:

  • Damage to property owned by your business, which needs to be
  • Issues relating to cyber security, cyber crime, data loss and data breaches, which are covered by Cyber Liability insurance
  • Professional mistakes or negligence which result in financial loss to customers or clients. These are covered by Professional Liability insurance
  • Claims stemming from decisions or actions made by executive or director, which would be covered by Directors & Officers insurance

These are additional insurance considerations that might be applicable depending on your business circumstances. General Liability Insurance, however, is often essential for many businesses, as it offers protection in your interactions with customers.

You can find out more about General Liability insurance and get a free quote here.

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